Question

Jadynn obtains a 30-year 7/3 ARM at 6% with a 3/6 cap structure in the amount of $436,500. What is the monthly payment during the initial period?

A. $2,812.38
B. $1,212.50
C. $2,904.05
D. $2,617.04

Answer 1

Hi there :)
The formula of the present value of annuity ordinary
Pv=pmt [(1-(1+r/k)^(-kn))÷(r/k)]
To solve for monthly payment
Pmt=pv÷[(1-(1+r/k)^(-kn))÷(r/k)]
Pmt=436,500÷((1−(1+0.06÷12)^(−12×30))÷(0.06÷12))=2,617.04...answer

Hope it helps